Oil futures end mixed after supply data

LisaSanders

NEW YORK (MarketWatch) -- Prices for crude oil and petroleum products closed mixed Wednesday on the New York Mercantile Exchange after the Energy Department and the American Petroleum Institute reported conflicting data on U.S. supplies.

Crude lost 52 cents to close at $60.85 a barrel, and gasoline lost 0.52 cent to close at $1.6407 a gallon. Heating oil rose 0.85 cent to close at $1.845 a gallon.

The Energy Department reported that distillate supplies fell only 100,000 barrels in the week ended Dec. 9. Separately, the API said they fell 3.54 million barrels. January heating oil rose 1.1 cents to $1.8475 a gallon on the New York Mercantile Exchange.

Also, the Energy Department said weekly crude supplies rose 900,000 barrels, while the API said they declined 1.94 million barrels. Crude futures gained 8 cents to $61.45 a barrel.

Gasoline stocks increased 1.8 million barrels, according to the Energy Department, while the API said they rose 412,000 barrels. Gasoline futures added 0.41 cent to $1.65 a gallon.

IFR Markets had expected the Energy Department to report a decline of 1 million to 2 million barrels in distillate supplies. The firm also forecast a reduction of 1 million to 3 million barrels in crude inventories and a buildup of 1 million to 2 million barrels in gasoline stockpiles.

"The DOE inventory data for last week was pretty uninspiring, with a slight downtick in refinery crude runs allowing a minor build in stocks to occur," IFR analyst Tim Evans said in a note to clients. "Distillate demand remained surprisingly subdued given the cold, but the market is taking it in stride, with confidence that the higher heating oil consumption will still translate into stronger offtake in due course."

According to the Energy Department, crude-oil inventories remain well above the upper end of the average range for this time of year at 321.2 million barrels. Gasoline inventories are in the lower half of the average range, and distillate supplies are in the middle of the average range.

Refineries operated at 89.6% of capacity last week, the Energy Department said, thus gasoline production and distillate fuel production fell in the week ended Dec. 9.

Over the past month, total products supplied averaged 20.8 million barrels a day, a 0.6% drop from the year-ago period. Demand for gasoline has averaged 9.2 million barrels per day, which is 1.1% above the year-ago period. Demand for distillate fuel averaged more than 4.1 million barrels a day for a 0.9% gain from last year. Jet fuel demand fell 5.6% over the last four weeks compared with last year.

Also Wednesday, a monthly report from the API said that refinery utilization improved to 88% in November from a low of 69% during the last week in September. However, 1.3 million barrels a day of refining capacity remained offline or at lower capacity last month due to the after-effects of hurricanes.

On the flip side, gasoline production was positive for the first time since February, up 0.4% from the year-ago period. Crude production was 4.6 million barrels a day, nearly 15% lower compared to year-ago levels.

Total refined petroleum product deliveries, which the API called a "key measure of demand," fell 2.8% percent in November.

On Thursday, the Energy Department is expected to report a sizable drawdown in U.S. natural-gas inventories. Estimates, which average 171 billion cubic feet, range from 105 billion cubic feet to 200 billion cubic feet.

"A forecast calling for frigid temperatures through most of December for the principal consumption should extend to the $16 area," said John Kilduff, senior vice president of energy risk management, in a note to clients.

"New contract highs were posted again yesterday, and at least another week or so of below-normal cold is expected, which should exert a significant influence on inventories even before winter officially begins" next week.

Natural gas, which set a record Tuesday, declined 69.9 cents to close at $14.679 per million British thermal units.

Stocks within the Amex Oil Index
XOI, -0.06%
were trading mostly higher, lifting the index 1.2% to close at 1,032.91 points. See Energy Stocks.

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